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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Claridge finds way to survive in struggling Atlantic City

10 September 2014

ATLANTIC CITY, N.J. -- (PRESS RELEASE) -- The Claridge is the past and the future of the Boardwalk.

The 1920s-era hotel was once the toast of Atlantic City, sitting at the famous intersection of Boardwalk and Park Place. It earned the market’s fourth gaming license, back when developer Del Webb owned the building.

But the Claridge hasn’t seen a slot machine handle pull or a toss of the dice since 2005.

Park Place Entertainment bought the property in 2001, shut down the gaming in 2005 and used the 500-room Claridge as a Bally’s - Atlantic City annex.

Some of the property’s unused slot machines sat collecting dust for nine years.

The building’s fortunes changed Memorial Day weekend.

Florida hotel developer TJM Properties paid $12.5 million for the historic hotel and spent millions more to convert the brick building into a boutique-style nongaming property.

During the summer months, Claridge guests spent anywhere from $100 a night at midweek, to $300 a night on weekends to stay at the refurbished hotel, which didn’t even have its own restaurant. Malcolm’s, a first floor lobby lounge and bar that took over the former casino cage area, doubled as a morning coffee stand.

The hotel lobby was restyled and is dotted with historic Atlantic City photos. The 25,000-square-foot convention area has a new shine.

Other changes are forthcoming.

A new restaurant — The 20s — will open in October. Entertainment offerings will be upgraded.

As for the Claridge’s two-level casino space?

The 30,000 square feet casino area on the ground floor is being converted into a high-end art gallery to feature some 50 artists. The second floor will house a children’s museum.

In a market where three hotel-casinos have closed since February, a fourth is scheduled to shut down next week, and a fifth is threatened with being shuttered by November, praise has been lavished on TJM owner Terence McCarthy for repurposing an old building and maintaining 130 jobs.

“The Claridge is an historic building, and we’re finding that our customers like the nongaming atmosphere,” said Claridge spokeswoman Sherry Amos.

Gaming revenue in Atlantic City has dropped 60 percent since 2007, but hotel occupancy ran in the high 90 percent range all summer. The closures of Revel, Showboat, Atlantic Club and next week’s shutdown of Trump Plaza will have removed more than 5,800 rooms from the market this year.

“Atlantic City needs rooms,” Resorts Atlantic City President Mark Giannantonio said Tuesday. “We’re entering a slow period, but the summer months are busy.”

Gaming leaders have hopes that TJM will work its magic on the Atlantic Club, which closed in February. There are hopes that the 801-room hotel-casino, developed as the original Golden Nugget Atlantic City by Steve Wynn, would reopen as a nongaming hotel, removing a eyesore from the Boardwalks’ southern end.

Caesars Entertainment Corp. Chairman Gary Loveman said the challenge facing Atlantic City is in reusing empty buildings in ways to continue to attract visitors to a changing market.

Casinos once catered to gamblers who stayed just a few hours. The trend is now for longer stays, at fewer casinos, in a city with a wider range of nongaming enticements.

“The buildings that used to be casinos have to be deployed as something else,” Loveman said. “Somebody has to find interest and take these buildings and do something good with them.”

Caesars closed the Showboat Atlantic City on Aug. 31 after the company was unable to find a buyer. Loveman said the company still hopes to sell it, and that real estate developers are most likely to have an interest in the boarded-up resort even if they intend to demolish it for redevelopment.

“We need to make decisions based on the surrounding conditions,” Loveman said. “The market must make improvements in order to provide the impression of a seaside modern resort-oriented environment.”

The Claridge was famously known as the “Skyscrapper by the Sea” in its early days when the 24-story building was the tallest in Atlantic City. The property catered to luminaries such as Chicago gangster Al Capone and Atlantic City political broker and racketeer Nucky Johnson — played as Nucky Thompson by Steve Buscemi on HBO’s “Boardwalk Empire.”

Frank Sinatra and Marilyn Monroe made the Claridge their playground.

Today, the Claridge could be the new model as many Atlantic City leaders explore their next steps in dealing with defunct hotel-casinos.